If oil companies like Shell reported the carbon footprint of oil from their operations in Nigeria, the numbers, in comparison to oil from other sources, could be shocking, even to SUV drivers. The relatively high carbon "footprint" of Nigerian oil based fuel is due to the practice of burning off natural gas from the well heads.

The extent to which a prospective global cap and trade program would hurt the bottom line of firms which burn natural gas off 24/7 will be driven by the transparency with which "flaring" is measured and reported, per barrel traded. And, it will be contingent on the existence of an effectively administered global cap and trade system for carbon emissions: emphasis on global.That speculated, the present response of Shell Oil to Nigerian government demands that widespread gas flaring be curtailed is precisely predicable: lobbying, followed with a begrudging promise of capitulation, if necessary.

Shell, like other publicly traded oil majors, is likely torn between maintaining large "reserves," the need to control upstream costs, the choice of shifting more investment to the Alberta Tar Sands (which does nothing for ducking the approaching carbon cap impacts), or putting out the eternal Nigerian flares, which have for decades been a tribute to industrial inefficiency. (The logical outlet for the gas not-flared then would be to produce LNG.)

Foreign oil firms in Nigeria are lobbying for the government to extend its deadline for an end to the wasteful practice of gas flaring, a request the government appears disinclined to grant.

A Shell executive in Lagos told reporters this week the company would petition for an extension past the December deadline to curb gas flaring, saying the goal date is not reachable, Nigeria's Daily Champion newspaper reported.

Gas flaring is caused by the burning off of surplus combustive vapors during the natural gas extraction process. While petroleum firms say it is a necessary precaution to release excess pressure during the extraction process, it is considered by others to be a waste of the natural resource and a potential hazard to the environment.

Managing Director of Shell Petroleum Development Co. Nigeria Ltd. Mute Sumonu said while his company would ask for an extension into 2009, it would abide by Nigerian law if officials would not acquiesce.

Nigerian oil, per the graphic, is a substantial input to the US driving machine and will remain so unless cap and trade makes it less competitive. Nigerian oil and Alberta Tar Sands derived oil have strong similarities in one regard: relatively high carbon footprints, respectively, in comparison to other nationalized fields, especially those controlled by Middle Eastern states.

Hence, among the greatest beneficiaries of a global cap & trade regulatory scheme will be the State-owned oil companies of the Middle East. Their relatively clean and green product will have the edge in a global trading environment affected uniformly by a globally based carbon cap and trade system.

What about the State controlled fields outside of the Middle East? Russian oil suppliers are notoriously spill prone, and (seemingly) environmentally unaccountable, reminiscent of the early Texas wildcatters.

The intensity of flaring practices in both Russia and Venezuela, presumably, would come under scrutiny in a global cap and trade regime. Beyond that it's hard to say how they would be affected by a global cap and trade regime without more information and insight into political outcomes.

Will the "oil majors" and Russia prospectively have to pay carbon penalties to Middle Eastern nations? This is where the real lobbying action of the future lies. This is where the UN will play a key role.

Could oil rich Middle Eastern nations see their prospective market advantage in tackling climate change, and begin to lobby for a global cap and trade system with teeth? You bet. Say you saw it first here Mr Friedman.